Semi-Annual ReportI decided to pick up some Class A shares this week for a trade. Over the past 6 months, the price of the Class A shares has traded in a very tight range where you can pick up the shares in the first week of the month and dump them for an average of a $0.35 gain before they go ex-dividend at the end of the month.
Someone was asking about the MER.
Here is a link to the Semi-Annual Report as of May 31,2023
[img]https://https://www.quadravest.com/_files/ugd/78f11d_c5e771d6d025484a9fa68662a01c6631.pdf[/img]
You will find the "per unit" data on page 7 and the expense ratios on page 8
The math should scare the crapp out of you which is why I will only stick to monthly trading.
The fund took in $0.41 in revenue and paid out $1.41 in distributions in the first half. Therefore, the fund is burning through $1 of NAV every six months.
Owning BK is really risky. In order for the NAV of the Class A common shares to appreciate more than the $2 per year OVER PAYMENT of dividends, the underlying bank stocks need to perform very well.
IMO, the key line items from the Report are the "Unrealized gains (losses) for the period on Page 7 with the Reaized gains (losses) being less important.
If the Unrealized Gain and Realized Gain don't exceed $1 for the 6 month period (or $2 for the year), the NAV will take a beating.
If you invest in BK (as opposed to trading it), it is imperative to believe that the bank stocks are going to perform very well.
2023 has been an awful year for the bank stocks so far which is why the NAV has dropped.
Will the bank stocks perform better going forward?
The large bank stocks in the USA are facing a strong headwind with the FED has mandated new capital requirements for large banks as of Oct 1st. The implication of the new requirement is that returns (ROE) will drop. Note that the new rules don't apply to Canadian banks.
The new capital requirements for large US banks are probably the reason why banks stocks have performed so poorly this year. I have no doubt that the banks will find work arounds in order to keep driving profits to the their bottom lines like they always do which will see the banks shine once again. In the meantime, vigilance is imperative